Correlation Between GlaxoSmithKline PLC and Mainstay Large
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Mainstay Large at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GlaxoSmithKline PLC and Mainstay Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and Mainstay Large Cap, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Mainstay Large and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GlaxoSmithKline PLC with a short position of Mainstay Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Mainstay Large.
Diversification Opportunities for GlaxoSmithKline PLC and Mainstay Large
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Mainstay is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap and GlaxoSmithKline PLC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GlaxoSmithKline PLC ADR are associated (or correlated) with Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Mainstay Large go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Mainstay Large
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Mainstay Large. In addition to that, GlaxoSmithKline PLC is 1.15 times more volatile than Mainstay Large Cap. It trades about -0.3 of its total potential returns per unit of risk. Mainstay Large Cap is currently generating about 0.14 per unit of volatility. If you would invest 1,368 in Mainstay Large Cap on August 25, 2024 and sell it today you would earn a total of 48.00 from holding Mainstay Large Cap or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Mainstay Large Cap
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Mainstay Large Cap |
GlaxoSmithKline PLC and Mainstay Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Mainstay Large
The main advantage of trading using opposite GlaxoSmithKline PLC and Mainstay Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Mainstay Large can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mainstay Large will offset losses from the drop in Mainstay Large's long position.| GlaxoSmithKline PLC vs. Novartis AG ADR | GlaxoSmithKline PLC vs. AstraZeneca PLC ADR | GlaxoSmithKline PLC vs. Roche Holding Ltd | GlaxoSmithKline PLC vs. Bristol Myers Squibb |
| Mainstay Large vs. Franklin Gold Precious | Mainstay Large vs. Oppenheimer Gold Special | Mainstay Large vs. Precious Metals And | Mainstay Large vs. Ocm Mutual Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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